VOLUME 5 - Revenue and Accounts Receivable

Transcription

1 Defense Finance and Accounting Service DFAS M Financial ment Systems Requirements Manual Volume 5, Revenue and Accounts Receivable September 2013 Strategy, Policy and Requirements SUBJECT: Description of Requirement Changes The complete listing and description of the requirements changes, deletions, and additions by chapters and systems requirements can be found below. All changes in this volume are denoted by bold blue font. VOLUME 5 - Revenue and Accounts Receivable Req ID Change Type Reason for Change and Description D - Invalid Requirement This is broad policy guidance, not a programmable or testable system requirement D - Not Supported by a Correct Source/Reference D - Duplicate Requirement Deleted A - New Based on Review of an Existing Authoritative source The authoritative source does not cover establishing obligations for receivables. Duplicate of and D - Duplicate Requirement Deleted D - Duplicate Requirement Deleted A - New Based on Review of an Existing Authoritative source Covered by requirements , and Duplicate of A - New Based on Review of an Existing Authoritative source D - Not Supported by a Correct Source/Reference A - New Based on Review of an Existing Authoritative source Authoritative source does not cover requirement

2 Chart Legend: A - Added These are new requirements due to revised and updated source documents. C - Changed These requirements were contained in previous releases, but were changed for various reasons. D - Deleted These requirements were removed and are no longer required by the source documents. Note: If there is no code in the requirements value added or change type columns, it is by definition unchanged.

3 Defense Finance and Accounting Service DFAS M Financial ment Systems Requirements Manual Volume 05, Revenue and Accounts Receivable September 2013 Strategy, Policy and Requirements SUBJECT: Financial ment Systems Requirements Volume 05, Revenue and Accounts Receivable 1. PURPOSE a. This Volume presents the financial management system design and implementation requirements for Department of Defense (DoD) military components and agencies Revenue and Accounts Receivable financial management systems. This Volume is part of the publication which reissues Defense Finance and Accounting Service (DFAS) M, Financial ment Systems Requirements Manual, commonly known as the Blue Book. This manual is a compilation of the Revenue and Accounts Receivable specific Federal and Department of Defense (DoD) systems requirements. Any system reviews need to consider all DFAS M volumes and requirements in addition to these Revenue and Accounts Receivable specific items contained in this volume. b. The Blue Book serves as a roadmap to Federal and DoD financial management system requirements by major financial management functional areas and their authoritative sources, and will assist managers who are responsible for financial management systems in planning, designing, enhancing, modifying, and implementing financial management systems. rs are ultimately responsible for being knowledgeable of and complying with the various authoritative sources of financial requirements (both legislative and regulatory). Guidance and procedures are contained in several volumes located on the DFAS Reference Library at Appendix 4 of the manual includes links to where authoritative sources of requirements may be accessed. c. Adherence to these requirements and all other applicable DFAS M requirements will enable DoD military components and agencies to meet Federal mandates and will help facilitate DFAS to progress toward reaching its strategic goal of providing services faster, better, and cheaper. The objective of this Volume is to promulgate the Revenue and Accounts Receivable specific financial management systems requirements for system and program managers use in developing Revenue and Accounts Receivable functionality. 2. APPLICABILITY: Requirements contained within this document are applicable to accounting and finance systems operated and maintained by DoD. 3. POLICY: a. This Volume provides a synopsis of Federal and DoD financial system requirements, i

4 DFAS M, Vol. 05 mandated by policy, for Revenue and Accounts Receivable financial management systems. It is a comprehensive compilation of financial management systems requirements mandated by Public Law , Federal Financial ment Improvement Act of 1996 September 30, b. This Volume incorporates revisions to existing financial system requirements from the authoritative sources via highlighting the appropriate text in bolded blue font. See description of requirement changes for a complete listing and description of the financial systems requirements changes, deletions, and additions, for this volume. c. Users of this Volume may forward questions, comments and suggested changes to: Defense Finance and Accounting Service Strategy, Policy and Requirements Attn: Financial ment Systems and Requirements Branch 8899 East 56th Street Indianapolis, IN questions, comments, and suggestions to ffmiarequirements@dfas.mil 4. ORGANIZATIONAL RESPONSIBILITIES FOR FFMIA COMPLIANCE a. Within DoD, various organizations operate financial management systems. In an overall scheme, many of these systems should be linked in an integrated network. However, these systems frequently stand-alone or stovepipe systems that are not logically integrated with other related systems. Critical financial data, instead of being transferred electronically between systems through well-controlled interfaces, are often transferred manually by means of journal vouchers, hardcopy spreadsheets, data calls, or other inefficient and error-prone methods. b. DFAS functions as the primary Departmental entity responsible for producing a Trial Balance from the ERP general ledger and preparing the financial reports for the DoD. Much of the data used by DFAS to carry out the DoD s accounting and financial reporting functions such as property and inventory values originate in non-dfas organizations or systems. Therefore, other organizations, primarily the military services and Defense agencies, should be held responsible for the compliance of their financial management systems with all applicable Federal requirements. Appendix 5 of DFAS M contains Federal and DoD guidance on FFMIA compliance, evaluation, and reporting. 5. PROCEDURES: Procedures are presented in each Volume of this Manual as appropriate. 6. RELEASABILITY: UNLIMITED. This Volume as part of DFAS M is approved for public release and may be accessed at 7. EFFECTIVE DATE: This Volume is effective immediately. ii

5 DFAS M, Vol. 05 TABLE OF CONTENTS REVENUE (INCLUDING FINANCING SOURCES) AND ACCOUNTS RECEIVABLE INTRODUCTION REVENUE (INCLUDING FINANCING SOURCES) AND ACCOUNTS RECEIVABLE REQUIREMENTS Chapter 01 - Recognize Revenue (Including Financial Sources) 2 Chapter Chapter 03 - Generate Bills/Statements 35 Chapter 04 - Record Collections 44 Chapter 05 - Delinquent Debt 52 Chapter 06 - Reporting 57 Chapter 07 - Customer Order Options 60 Chapter 08 - Remittance Options 62 Chapter 09 - Cashier Function 63 Chapter 10 - Proprietary and Budgetary Accounting Functions 65 Chapter 11 - Deposit Account Function 71 Chapter 12 - Transaction Validation 74 Chapter 13 - Revenue Recognition 76 Chapter 14 - Revenue Estimation 78 Chapter 15 - Automated Reconciliation 79 Chapter 16 - Performance Measurement 79 Chapter 17 - Audit Trail 80 Chapter 18 - On-Line Query Capability 80 Chapter 19 - Ad-Hoc Query Capability 82 Chapter 21 - Interface Requirements 83 ACRONYMS iii

6 REVENUE AND ACCOUNTS RECEIVABLE INTRODUCTION DFAS M, Vol The Department of Defense, like most Federal agencies, receives the vast majority of its operating funds through appropriations authorized by the Congress. From the proprietary accounting perspective, appropriations are accounted for as financing sources when used. Appropriations used occurs when an entity acquires goods and services or provides grants that are authorized to be paid out of those appropriations. The Department annually uses over $200 billion of appropriated capital. 2. However, in addition to appropriations, the Department of Defense annually earns over $50 billion of revenues from providing goods and services to the public and other governmental entities. The Department s revenue arose as a result of exchange transactions, i.e., the Department provided goods and services in exchange for monetary resources. In any given year, DoD receives about $300 billion in revenues and financing sources (including interest earned, gains, donations, and other miscellaneous inflows of resources). 3. Accounting and systems requirements for recognizing revenue and financing sources and establishing and managing receivable/debts are primarily contained in the Office of Federal Financial ment (OFFM- NO-0106), Joint Financial ment Improvement Program System Requirements (JFMIP- SR-03-01, Reference (e)), Statement of Federal Financial Accounting Standards (SFFAS), reporting requirements of Treasury Federal Agencies Centralized Trial-Balance System (FACTS) I and FACTS II, and intergovernmental reconciliations and eliminations in accordance with Office of ment and Budget (OMB) Bulletin No , as amended (Reference(f)) and the Department of Defense Financial ment Regulation (DoDFMR), Volume 4 (Reference (g)). This volume and other DFAS M volumes may be applicable to your system. Revenue Accounts Receivable - 1

7 Recognize Revenue (Including Financial Sources) When a transaction with the public or another Government entity is at a price that is unusual or nonrecurring, the system shall recognize a gain or loss rather than revenue or expense so as to differentiate such transactions. Source: SFFAS7,35; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1603; Source Date: 6/1/2012 ment Procure-to- ment Procure-to- Recognize_Revenue_0 01 Recognize Revenue (Including Financial Sources) The system must recognize revenue when services are provided to the public or another government entity (except for specific services produced to order under a contract). Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012 Receivables Supply Chain EntitlementPost to Recognize_Revenue_0 02 Revenue Accounts Receivable - 2

8 Recognize Revenue (Including Financial Sources) When specific goods are made to order under a contract (either short or long term), or specific services are produced to order under a contract (either short or long term), the system shall recognize monthly revenue based on the ratio that the costs incurred to date on that order bear to the total costs estimated to be incurred on the order when it is completed. If a loss is probable (more likely than not), revenue shall continue to be recognized in proportion to the estimated total cost and costs should continue to be recognized when goods and services are acquired to fulfill the contract. Thus, the loss shall be recognized in proportion to total cost over the life of the contract When goods are kept in inventory so that they are available to customers when ordered, the system must recognize revenue only when the goods are issued to the customer. Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012 Receivables Supply Chain EntitlementPost to ment Procure-to- Recognize_Revenue_0 03 Recognize Revenue (Including Financial Sources) Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012 ment Procure-to- Recognize_Revenue_0 04 Revenue Accounts Receivable - 3

9 Recognize Revenue (Including Financial Sources) When services are rendered continuously over time or the right to use an asset extends continuously over time, the system shall recognize revenue in proportion to costs incurred or the use of the asset, as appropriate. Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012 ment Procure-to- ment Procure-to- Recognize_Revenue_0 05 Recognize Revenue (Including Financial Sources) When an asset other than inventory is sold, the system must recognize any gain (or loss) when the asset is delivered to the purchaser. Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012 Recognize_Revenue_0 06 Revenue Accounts Receivable - 4

10 Recognize Revenue (Including Financial Sources) The system shall record all advances, including those under any long-term contract in excess of revenue earned, as unearned revenue. The system, for the DoD Components receiving an advance (unearned revenue) or prepayment (deferred credit), shall record the amount received as a liability until payment is earned (goods or services have been delivered or contract terms met). After the payment is earned (performance has occurred), the DoD Component's system shall record the appropriate amount as revenue and reduce the liability accordingly. Source: DoDFMRVol4,Ch12,S ub1202; Source Date: 11/1/2011Source: SFFAS7,37; Source Date: 4/1/1996 Liabilities ment Procure-to- Recognize_Revenue_0 07 Recognize Revenue (Including Financial Sources) To the extent that realization of the full amount of revenue is not probable due to returns, allowances, price redetermination, or other reasons apart from credit losses, the system must reduce recognized revenue by separate provisions (such as through the use of a sales return account) for amounts that can be reasonably estimated. The amount of such provisions must be reflected as revenue adjustments, rather than cost of operations, and must be separately shown. Source: SFFAS7,41; Source Date: 4/1/1996 ment Procure-to- Recognize_Revenue_0 08 Revenue Accounts Receivable - 5

11 Recognize Revenue (Including Financial Sources) The system shall recognize revenue arising from donations for those inflows of resources which meet recognition criteria for assets and shall be measured at the estimated fair value of the contribution. Source: SFFAS7,62; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1603; Source Date: 6/1/2012 ment Procure-to- ment Procure-to- Recognize_Revenue_0 09 Recognize Revenue (Including Financial Sources) The system must recognize appropriations used as a financing source in determining net results of operations. Source: SFFAS7,72; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1604; Source Date: 6/1/2012 Recognize_Revenue_0 10 Revenue Accounts Receivable - 6

12 Recognize Revenue (Including Financial Sources) To the extent a government entity receives goods and services from another government entity without reimbursing the other entity for all related costs, the system must recognize an imputed financing source equal to the imputed cost. This offsets any effect of imputed cost on net results of operation for the period. Source: SFFAS7,73; Source Date: 4/1/1996 Receivables Supply Chain EntitlementPost to ment Procure-to- ment Procure-to- Recognize_Revenue_0 11 Recognize Revenue (Including Financial Sources) To the extent that a government entity incurs costs, such as pension costs that are paid in total or in part by other entities the system must recognize an imputed financing source equal to the imputed costs. Source: SFFAS7,73; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1603; Source Date: 6/1/2012 Recognize_Revenue_0 12 Revenue Accounts Receivable - 7

13 Recognize Revenue (Including Financial Sources) When interest earned represents interest on invested funds, which was derived primarily from exchange transactions, the system shall classify the amount earned in the same manner as the predominant source of the invested balances. Source: SFFAS7,36; Source Date: 4/1/1996Source: DoDFMRVol4,Ch16,S ub1604; Source Date: 6/1/2012 ment Procure-to- Recognize_Revenue_0 13 Recognize Revenue (Including Financial Sources) The system shall account for amounts received in advance of performance as unearned revenues until performance is accomplished. The system must also recognize unearned revenue prior to the receipt of cash if the agency requests advances or progress payments prior to the receipt of cash and records the amount The system shall recognize exchange revenue in determining the net cost of operations on the reporting entity's 'Statement of Net Costs' during the period. The exchange revenue shall be recognized regardless of whether the entity retains the revenue for its own use or transfers it to other entities. Source: DoDFMRVol4,Ch16,S ub1602; Source Date: 6/1/2012Source: SFFAS7,37; Source Date: 4/1/1996 Post to _AR_Maintai formation_062 Recognize Revenue (Including Financial Sources) Source: SFFAS7,43; Source Date: 4/1/1996 ReceivablesPerform Financial ReportingPost to Recognize_Revenue_0 14 ment Procure-to- Revenue Accounts Receivable - 8

14 Recognize Revenue (Including Financial Sources) The system shall recognize and measure exchange revenue under the exchanged revenue standards regardless of whether the related costs are recognized. Source: SFFAS7,45; Source Date: 4/1/1996 ment Procure-to- Recognize_Revenue_0 17 Recognize Revenue (Including Financial Sources) For an entity that provides goods or services to the public or another government entity, the system must support disclosure in its financial statements the nature of those Intragovernmental exchange transactions in which the entity provides goods or services at a price less than the full cost or does not charge a price at all. Disclosures must include an explanation of the amount and the reason for the disparity between the billing (if any) and full cost The system shall have the ability to receive and post an electronic version of a funding instrument i.e., Interservice Support Agreement (ISSA), Interagency Agreement (IAA) or Memorandum of Agreement (MOA), containing accounting data. Source: SFFAS7,46; Source Date: 4/1/1996 Recognize_Revenue_0 22 Recognize Revenue (Including Financial Sources) 0106,FMC-01; Source Recognize_Revenue_0 23 Revenue Accounts Receivable - 9

15 To support the Receivables and Billing process, the Core financial system must provide automated functionality to record accounts receivable and corresponding revenues, expense reductions, advance/prepayment reclassifications, or other offsets. 0106,RMB-01; Source Date: 1/1/2006Source: JFMIPSR-03-01,RMP- 1; Source Date: 1/1/2003 ment Procure-to- _AR_Maintai formation_ To support the Receivables and Billing process, the Core financial system must provide automated functionality to reschedule existing receivables to be paid under installment plans. 01,RMP-4; Source Date: 1/1/2003Source: OFFM-NO- 0106,RMB-21; Source _AR_Maintai formation_ To support the Receivable ment Process, the Revenue System must provide the capability to accept and establish transactions that generate revenue receivables. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009Source: JFMIPSR-03-01,RMP- 2; Source Date: 1/1/2003 ment Procure-to- _AR_Maintai formation_003 Revenue Accounts Receivable - 10

16 To support the Debt ment function, the Revenue System must provide the capability to maintain accounts for reimbursable orders and identify government and nongovernment accounts that are designated as advance funding. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009Source: JFMIPSR-03-01,DM- 2; Source Date: 1/1/2003 ment Procure-to- ment Procure-to- _AR_Maintai formation_ To support the Debt ment function, the Revenue System must provide the capability to maintain data for receivables referred to other federal agencies and outside organizations for collections and allow for electronic updates. 01,DM-11; Source _AR_Maintai formation_005 Revenue Accounts Receivable - 11

17 To support the Customer Maintenance process, the Core financial system must provide automated functionality to maintain customer information to support receivable management processes including the following: Customer name Customer ID number Customer type (Federal agency, foreign/sovereign, state/local government, commercial, or consumer) Billing method (Intragovernmental Payment and Collection (IPAC), 1081, paper bill, or other) Taxpayer Identification Number (TIN) Customer address Customer contact name Customer contact telephone number Customer contact address Federal vs. Non-Federal indicator Government wide Financial Report System (GFRS) and Federal Agencies' Centralized Trial-Balance System (FACTS) I Trading Partner codes (for Federal customers) Agency Locator Code (ALC) (for Federal customers) IRS 1099-C indicator Third-party payer name Third-party payer address Thirdparty payer contact name Thirdparty payer contact telephone number Comment field Data Universal Numbering System (DUNS)+4 number Active/Inactive indicator. 0106,RMA-01; Source _AR_Maintai formation_006 Revenue Accounts Receivable - 12

18 To support the Debt ment function, the Revenue System must provide the capability to update each customer account when: billing documents are generated, collections are received, interest, penalty or administrative fees are applied, and when amounts are written-off or offset. 01,DM-3; Source ment Procure-to- ment Procure-to- _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to calculate and record late payment interest charges on overdue non- Federal receivables based on the Treasury Current Value of Funds Rate (CVFR) unless otherwise specified by the agency. 0106,RMC-01; Source _AR_Maintai formation_008 Revenue Accounts Receivable - 13

19 To support the Receivables and Billing process, the Core financial system must provide automated functionality to query outstanding receivable balance. Parameter is the receivable document number. Result is the original amount of the receivable, the current outstanding amount of the receivable and a detailed list of all activity related to the receivable, including: Adjustments Interest Penalties Administrative charges Collections Waivers Write-offs. 01,OLQ-9; Source Date: 1/1/2003Source: OFFM-NO- 0106,RMB-25; Source _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to generate an Accounts Receivable Aging Report. Parameters include: Accounting Period Treasury Account Symbol (TAS) or Internal Fund Code Account Customer type Federal/Non Federal Indicator Customer ID number. Result is a report that displays the outstanding receivable balances in each of the Delinquent Debt Age categories listed on the Treasury Report on Receivables (TROR). 0106,RMC-08; Source ReceivablesPerform Financial Reporting Planto-Stock -- Inventory ment _AR_Maintai formation_010 Revenue Accounts Receivable - 14

20 To support the Collections and Offsets process, the Core financial system must provide automated functionality to record collections of refunds of advance payments or prepayments. If a receivable was not previously established, reference the advance obligation. Reduce cumulative advances under the obligation. 0106,RMD-07; Source ment Procure-to- ment Procure-to- _AR_Maintai formation_ To support the Receivables and Billing process, the Core financial system must provide automated functionality to record adjustments to receivables and capture a reason and description on each adjustment. 0106,RMB-02; Source _AR_Maintai formation_012 Revenue Accounts Receivable - 15

21 To support the Debt ment process, the Core financial system must provide automated functionality to query customer receivables. Parameters include Customer ID Number, Customer Name, TIN, Trading partner codes. Result is a display of the customer's information (e.g., customer ID number, customer name, TIN, trading partner codes) and all receivable-related activity associated with the customer, including the following: Principal Interest Penalties Administrative charges Adjustments Collections Waivers Write-offs Receivable balance. Group interest, penalties, and administrative charges with their associated principal. Drill down to the detailed transactions, documents, and document details (e.g., document numbers, transaction dates, document reference numbers, receivable statuses (billed or unbilled), bill numbers (if billed), bill dates, dunning notice dates, referral dates, due dates, and delinquent debt statuses). 0106,RMC-20; Source _AR_Maintai formation_ To support the Receivables and Billing process, the Core financial system must provide automated functionality to capture the following additional information on receivable documents: Baseline receivable date (used to properly age the receivable and determine the delinquency date) Customer ID number Reimbursable agreement number. 0106,RMB-04; Source _AR_Maintai formation_014 Revenue Accounts Receivable - 16

22 To support the Debt ment process, the Core financial system must provide automated functionality to classify delinquent debt by the following categories needed for the Treasury Report on Receivables TROR: In Bankruptcy In Forbearance or formal appeals process In Foreclosure At private collection agencies At DOJ Eligible for internal offset In wage garnishment At Treasury for crossservicing At Treasury for Offset At Agency Other. 0106,RMC-18; Source _AR_Maintai formation_ For all non-federal agency receivables (due from the public), the system must record an allowance for uncollectible amounts to reduce the gross amount of receivables to net realizable value, and estimate the allowance for uncollectible amounts in accordance with SFFAS-1 paragraphs The allowance for uncollectible amounts must be reestimated on each annual financial reporting date and when information indicates that the latest estimate is no longer correct. Source: DoDFMRVol4,Ch3,Su b0304; Source Date: 11/1/2009Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009 ment Procure-to- _AR_Maintai formation_016 Revenue Accounts Receivable - 17

23 The system must record an interest receivable for the amount of interest income earned but not received for an accounting period. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009Source: SFFAS1,53; Source Date: 3/1/1993 ment Procure-to- ment Procure-to- _AR_Maintai formation_ The system shall not recognize interest on accounts receivable or investments that are determined to be uncollectible unless the interest is actually collected. However, until the interest payment requirement is officially waived by the government entity or the related debt is written off, interest accrued on uncollectible accounts receivable shall be disclosed. Source: SFFAS1,54; Source Date: 3/1/1993Source: 31CFR,Vol1,SubttlB,C hix,pt901; Source Date: 9/1/2010 ReceivablesPerform Financial ReportingPost to _AR_Maintai formation_018 Revenue Accounts Receivable - 18

24 To support the Receivables and Billing process, the Core financial system must provide automated functionality to query reimbursable agreements. Parameters include Reimbursable Agreement Number, Customer ID Number, Customer Name, Project, or Fund. Result is a display of the following information for each reimbursable agreement selected: Period of performance Billing terms Reimbursable agreement amount Billing limit Amount obligated Amount expended Unfilled customer order amount Advances collected Advances applied to earned revenue Remaining balance on advances Amount earned Amount billed Amount collected on receivables Outstanding accounts receivable (billed and unbilled) The system must be able to distinguish between entity receivables and non-entity receivables. 0106,RMB-26; Source _AR_Maintai formation_019 Source: SFFAS1,43; Source Date: 3/1/1993 Financial ment Policy _AR_Maintai formation_020 Revenue Accounts Receivable - 19

25 The system must account for interest receivable from federal entities separately from interest receivable from the public. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009Source: SFFAS1,56; Source Date: 3/1/1993 ment Procure-to- ment Procure-to- _AR_Maintai formation_ The system must recognize interest receivable as it is earned on investments in interest-bearing securities and also on outstanding accounts receivable and other U.S. government claims against persons and entities in accordance with provisions in 31. U.S.C. 3717, Interest and Penalty claims. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009Source: SFFAS1,53; Source Date: 3/1/1993 _AR_Maintai formation_022 Revenue Accounts Receivable - 20

26 To support the Debt ment process, the Core financial system must provide automated functionality to calculate and record penalties and administrative charges on overdue receivables based on an agencyassigned rate or amount for a particular receivable, customer, customer type, or receivable type. Source: DoDFMRVol4,Ch3,A nn1; Source Date: 11/1/2009Source: OFFM-NO- 0106,RMC-03; Source ment Procure-to- e Hire-to-Retire Orderto-Cash Prospect-to- Order Service Requestto- Service-to- _AR_Maintai formation_ To support the Collections and Offsets process, the Core financial system must provide automated functionality to query collections. Parameters include: Source Customer ID number Customer name TIN Reimbursable agreement number Receivable document number Deposit date range Accounting period Accounting classification. Result is a list of collections within the specified parameters, with the values for all the possible parameters. 0106,RMD-11; Source _AR_Maintai formation_025 Revenue Accounts Receivable - 21

27 To support the Bill Generation function, the Revenue System must provide the capability to record billings by line item in order to identify specific accounting classification codes. 01,BG-3; Source ment Procure-to- ment Procure-to- _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to calculate and record late payment interest charges on overdue non- Federal receivables based on an agency-assigned interest rate different from the Current Value of Funds Rate (CVFR) for a particular receivable, customer, or customer type. Source: DoDFMRVol4,Ch3,A nn1; Source Date: 11/1/2009Source: OFFM-NO- 0106,RMC-02; Source _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to optionally cease or continue accruing interest on delinquent debts that have been referred to Treasury or another agency. 0106,RMC-05; Source _AR_Maintai formation_028 Revenue Accounts Receivable - 22

28 To support the Debt ment process, the Core financial system must provide automated functionality to query accounts receivable by age categories. Parameters include: Accounting Period TAS or Internal Fund Code Account Customer type Federal/Non Federal Indicator Customer ID number. Result is a display of the outstanding receivable balances in each of the Delinquent Debt Age categories listed on the TROR. Drill-down to a detailed list of outstanding receivables within any one age category. 0106,RMC-09; Source _AR_Maintai formation_ To support the Collections and Offsets process, the Core financial system must provide automated functionality to revenue received under reimbursable agreements. Update the earned revenue balances on the reimbursable agreements. 0106,RMD-09; Source _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to generate the Treasury Report on Receivables (TROR). Parameter is the fiscal year and quarter. Result is the TROR in accordance with Treasury form and instructions. Ensure reported totals agree with the general ledger. 0106,RMC-19; Source e Hire-to-Retire Orderto-Cash Prospect-to- Order Service Requestto- Service-to- _AR_Maintai formation_031 Revenue Accounts Receivable - 23

29 To support the Debt ment process, the Core financial system must provide automated functionality to optionally record interest, penalties, or administrative costs to accounting classification elements that are different from those to which the principal amount is recorded. 0106,RMC-04; Source ment Procure-to- _AR_Maintai formation_ To support the Receivables and Billing process, the Core financial system must provide automated functionality to Capture an agencydefined receivable type on receivable documents to identify the activity which generated the receivable, such as: the sale of goods or services, overpayments, unused advances subject to refund, fees and fines. 0106,RMB-03; Source _AR_Maintai formation_ To support the Receivables and Billing process, the Core financial system must provide automated functionality to reschedule a receivable multiple times. 0106,RMB-22; Source Prospect-to-Order _AR_Maintai formation_034 Revenue Accounts Receivable - 24

30 To support the Receivables and Billing process, the Core financial system must provide automated functionality to generate a Debt Repayment Amortization Schedule. Parameters include the receivable number, final due date, begin date, frequency of payments, and interest rate. Result is an amortization schedule that displays the original amount of debt, payment dates, amount of incremental payments, and balance remaining after each payment for debt being paid under an installment plan or rescheduled debt. 0106,RMB-23; Source _AR_Maintai formation_ To support the Debt ment process, the Core financial system must provide automated functionality to classify receivables written off as 'Currently not Collectible' or 'Closed Out.' To support the Debt ment process, the Core financial system must provide automated functionality to update receivables with dunning notice dates, referral dates, and comments to support debt collection activities. 0106,RMC-12; Source 0106,RMC-16; Source Financial ment Policy _AR_Maintai formation_036 Prospect-to-Order _AR_Maintai formation_037 Revenue Accounts Receivable - 25

31 To support the Collections and Offsets process, the Core financial system must provide automated functionality to record advances (unearned revenue) received under reimbursable agreements. Update the advance balances on the reimbursable agreements. 0106,RMD-08; Source ment Procure-to- _AR_Maintai formation_ To support the Collections and Offsets process, the Core financial system must provide automated functionality to generate a refund payable when collections of advances from others exceed the amount expended or billed on a reimbursable agreement after all work is performed. Update the advance balances on the reimbursable agreements. 0106,RMD-10; Source _AR_Maintai formation_039 Revenue Accounts Receivable - 26

32 To support the Customer Maintenance process, the Core financial system must provide automated functionality to validate TINs when adding or updating customer records. Notify the agency when duplicate TINs are identified. Allow the error message to be overridden. 0106,RMA-02; Source ment Procure-to- _AR_Maintai formation_ To support the Customer Maintenance process, the Core financial system must provide automated functionality to query customer file. Parameters include: Customer number Customer name Customer Taxpayer Identification Number (TIN) Data Universal Numbering System (DUNS)+4 number IRS 1099-C indicator Result is a display of all data for the specified customer. 0106,RMA-03; Source _AR_Maintai formation_ To support the Customer Maintenance process, the Core financial system must provide automated functionality to maintain a history of changes made to customer information. Capture name of data item changed, before and after values, entry date and time and ID of user who made the change. 0106,RMA-04; Source _AR_Maintai formation_042 Revenue Accounts Receivable - 27

33 To support the Customer Maintenance process, the Core financial system must provide automated functionality to query customer history. Parameters include customer number, change date range. Results include date and time of change, ID of user who made the change, item name, before and after data values. 0106,RMA-05; Source _AR_Maintai formation_ To support the Customer Maintenance process, the Core financial system must provide automated functionality to deactivate customers on demand or based on agency-specified length of time with no activity. 0106,RMA-06; Source _AR_Maintai formation_ To support the Customer Maintenance process, the Core financial system must provide automated functionality to prevent the deactivation of customers that have unliquidated receivables in the system. 0106,RMA-07; Source _AR_Maintai formation_ To support the Receivable ment Process, the Revenue System must provide the capability to establish receivables to be paid under installment plans, including plans for which payments have been rescheduled. Generate flexible repayment schedules for delinquent indebtedness. 01,RMP-4; Source _AR_Maintai formation_ To support the Debt ment function, the Revenue System must provide the capability to maintain data on individual receivables and referenced transactions supporting the receivable. 01,DM-1; Source _AR_Maintai formation_047 Revenue Accounts Receivable - 28

34 To support the Debt ment function, the Revenue System must provide the capability to allow the user to specify administrative and penalty amounts and record these amounts to different accounting classification elements for which the principal amount is recorded. Automatically apply these charges to customer accounts and generate separate line items for the charges on the customer bills. 01,DM-5; Source ment Procure-to- ment Procure-to- _AR_Maintai formation_ To support the Debt ment function, the Revenue System must provide the capability to provide an automated process for issuing invoices and follow-ups every 30 days, and generate posting/updating to the with automated audit trail to source documents (OMB Circular A-129). 01,DM-6; Source _AR_Maintai formation_050 Revenue Accounts Receivable - 29

35 To support the Debt ment function, the Revenue System must provide the capability to follow instructions provided in authoritative guidance: Automatically age receivables as described in OMB Circular A-129; Provide referral of payment history to Credit Reporting Bureaus (31 U.S.C. 3711); Refer all applicable non-federal accounts receivable over 180 days to Treasury for Offset (DCIA of 1996); and Generate report of accounts receivable for debts in excess of $100,000 for approval or write-off (31 CFR Part 902) To support the Debt ment function, the Revenue System must provide the capability to compute simple and compound interests for user-defined (or according to a contractual or modification agreement) time frames using fixed and variable rates. 01,DM-7; Source _AR_Maintai formation_051 01,DM-14; Source _AR_Maintai formation_053 Revenue Accounts Receivable - 30

36 To support the Debt ment function, the Revenue System must provide the capability to track and report on the date and nature of changes in the status of an accounts receivable, including the following: In Forbearance or in Formal Appeals Process; In Foreclosure; In Wage Garnishment; Rescheduled; Current; Waived/un-waived; Eligible for Referral to Treasury for Offset; Referred to Treasury for Offset; Eligible for Internal Offset; Eligible for Referral to Treasury or a Designated Debt Collection Center for Cross-servicing; Referred to Treasury for cross-servicing; Referred to private collection agency; Referred to Department of Justice [with tracked cases by code and date]; Offset; Suspended; Compromised; Currently not collectible (written off, but not yet closed out); Written-off; and Closed Out. 01,DM-21; Source ment Procure-to- _AR_Maintai formation_ To support the Debt ment function, the Revenue System must provide the capability to offset payments to debtors for amounts due to the agency (e.g., outstanding accounts receivable, credit memo, and open advances). When an entire payment is offset, create the appropriate notice to the vendor that the offset has been made. 01,DM-23; Source e _AR_Maintai formation_056 Revenue Accounts Receivable - 31

37 To support the Debt ment function, the Revenue System should provide the capability to support ability to capture free form notes (i.e., comments from phone messages) by date and to retrieve comments by date To support the Debt ment function, the Revenue System should provide the capability to provide a status code with user definable text values that can be used for monitoring and tracking accounts. 01,DM-25; Source _AR_Maintai formation_057 01,DM-26; Source _AR_Maintai formation_ The system must record, as accounts receivable, uncollected amounts earned from reimbursable sales. Source: DoDFMRVol4,Ch3,Su b0303; Source Date: 11/1/2009 ment Procure-to- _AR_Maintai formation_ D - Invalid Requirement Lump-sum collections by offset from current pay or salary, unless voluntary, cannot exceed the percentages specified in Volume 7A, Chapter 50, Volume 7B, Chapter 28, and Volume 8, Chapter 8 of this Regulation, and other applicable regulations. Source: DoDFMRVol5,Ch28,S ub2803; Source Date: 11/1/2012 Collections Financial ment Policy Human Resources Compensation and ReimbursementsMana ge Receivables _AR_Maintai formation_061 Revenue Accounts Receivable - 32

38 The system shall have the capability to record an unfilled customer order for a reimbursable agreement The system shall have the capability to generate approved customer refunds by document or by line item detail The system shall not assess interest until the due date for payment of indebtedness has passed, unless otherwise established in a legally binding document The system shall apply administrative costs to only delinquent debts (i.e., debts not paid for 30 or more days from the date the demand letter was mailed) The system shall have the capability to store amounts owed to Federal Entities to include base charges, surcharges, and administrative charges The system shall provide the user the capability to suspend collection action when a contractual debt is in dispute D - Not Supported by a Correct Source/Reference The system shall provide an authorized user the capability to establish an obligation for receivables. Source: DoDFMRVol4,Ch3,Su b0305; Source Date: 11/1/ ,RMD-10; Source Source: DoDFMRVol10,Ch18, Sub1809; Source Date: 12/1/2010 Source: DoDFMRVol10,Ch18, Sub1809; Source Date: 12/1/ ,RMC-03; Source Source: DoDFMRVol10,Ch18, Sub1807; Source Date: 12/1/2010 Source: DoDFMR Vol 03, Ch 08, A; Source Date: 9/1/2009 _AR_Maintai formation_063 _AR_Maintai formation_064 _AR_Maintai formation_065 _AR_Maintai formation_066 _AR_Maintai formation_067 _AR_Maintai formation_068 Revenue Accounts Receivable - 33

39 D - Duplicate Requirement Deleted The Intra-Governmental (IG) order, along with other data required by the order, shall contain: A. Business Partner Network (BPN) Number. B. The common agreement number (order number). C. The appropriate Treasury Account Symbol (TAS) for both Trading Partners. If multiple TAS are included on one order, specify amounts for each TAS, as appropriate. D. The Business Event Type Code (BETC) for both Trading Partners. E. The amounts to accrue, advance, or disburse. F. Federal/Non-Federal Indicator. G. Buyer Entity Code (Elimination Entity Code) H. The amount and method of payment. I. An alternate dispute resolution clause. J. Effective date and duration of the agreement to include the expiration of the funding source. K. The method and frequency of reporting (revenue and expenses). L Termination clause if applicable. M. Contracting Officer point of contact information. N. Provisions for advanced payments and method of liquidating of such advance. Source: I TFM , Attachment 1,III.D, VI.A.1-3; Source Date: 10/1/2006Source: DoDFMR Vol 05, Ch 24,Fig 24-4; Source Date: 3/1/2012Source: OFFM-NO-0106,FBA- 08/09; PME-02;PMD- 45; Source Date: 1/1/ A - New Based on Review of an Existing Authoritative source To support the Debt ment function, the Revenue System must provide the capability to calculate (as a percentage of gross receivables or related revenues) and record the allowance for doubtful accounts based on historical experience, review of files, or other data indicating trend. 01,DM-17; Source _AR_Maintai formation_054 Revenue Accounts Receivable - 34

40 Generate Bills/Statements To support the Receivables and Billing process, the Core financial system must provide automated functionality to calculate billing amounts and generate bills to customers based on reimbursable agreement billing terms, such as: Percentage of work completed Accrued expenditures Actual costs incurred (direct and indirect using data from the cost management system). Include the following information on the bills: Customer name Customer address Customer contact name Agency contact name, office, address and telephone number; and Date due. 0106,RMB-07; Source Generate_Bills_And_S tatements_001 Generate Bills/Statements D - Duplicate Requirement Deleted To support the Receivables and Billing process, the Core financial system must provide automated functionality to generate bills in hard-copy format, including Standard Forms 1080 and 1081 and capture a unique bill number and a bill date on system-generated bills. Allow for customized text and descriptive information in generating billing documents To support the Receivable ment Process, the Revenue System must provide the capability to support bills and collections between Federal agencies through the use of electronic systems such as IPAC. Provide supporting data to agencies billed which can be used to verify the charges. Source: ; Source Date: Generate Bills/Statements D - Duplicate Requirement Deleted Source: DoDFMRVol4,Ch3,Su b0305; Source Date: 11/1/2009Source: JFMIPSR-03-01,RMP- 6; Source Date: 1/1/2003 Revenue Accounts Receivable - 35

41 Generate Bills/Statements To support the Receivables and Billing process, the Core financial system must provide automated functionality to capture information from manually prepared bills. Update receivable document (e.g., change status of receivable from unbilled to billed) with manual bill information. 0106,RMB-19; Source Generate_Bills_And_S tatements_004 Generate Bills/Statements To support the Receivables and Billing process, the Core financial system must provide automated functionality to derive the bill date from the system date and allow for override. 0106,RMB-15; Source Date: 1/1/2006Source: JFMIPSR-03-01,BG- 7; Source Date: 1/1/2003 Generate_Bills_And_S tatements_005 Revenue Accounts Receivable - 36

42 Generate Bills/Statements To support the Receivables and Billing process, the Core financial system must provide automated functionality to generate Customer Account Statements. Parameters include customer type, customer ID number, customer name, and time period (month, quarter, year-to-date). Result is a statement for each customer that includes: Statement date Customer ID number Customer name Customer address Customer contact name Agency name Agency contact name Agency contact phone number Agency contact address Balance brought forward Receivables established (including due dates) Interest Penalties Administrative costs Adjustments made Collections received (identify principal, interest, penalties, and administrative charges separately to indicate how collections were applied) Outstanding receivable balance. Provide agency the option to generate customer statements in Excel format. 0106,RMB-24; Source ReceivablesPerform Financial Reporting Planto-Stock -- Inventory ment Prospectto-Order Service Request-to- Generate_Bills_And_S tatements_006 Generate Bills/Statements To support the Debt ment process, the Core financial system must provide automated functionality to generate dunning notices on overdue receivables at frequencies specified by the agency, including on-demand, and by agency-defined parameters, including customer type. 0106,RMC-06; Source Date: 1/1/2006Source: JFMIPSR-03-01,DM- 15; Source Date: 1/1/2003 Generate_Bills_And_S tatements_007 Revenue Accounts Receivable - 37

43 Generate Bills/Statements To support the Debt ment process, the Core financial system must provide automated functionality to customize text used on dunning notices based on receivable age categories and customer types. 01,DM-24; Source Date: 1/1/2003Source: OFFM-NO- 0106,RMC-07; Source Generate_Bills_And_S tatements_008 Generate Bills/Statements To support the Receivables and Billing process, the Core financial system must provide automated functionality to customize the text and data elements to be displayed on system-generated bills, by customer type, receivable type, or billing method. For example, an IPAC bill for the sale of goods and services would need to contain different supporting text than a bill to an employee for an overpayment To support the Receivables and Billing process, the Core financial system must provide automated functionality consolidate multiple receivables for a customer onto one bill retaining identification of each receivable separately within the bill To support the Receivables and Billing process, the Core financial system must provide automated functionality to capture the original baseline receivable date on receivables converted from legacy systems, in order to properly age the receivable. 0106,RMB-11; Source Generate_Bills_And_S tatements_009 Generate Bills/Statements 0106,RMB-17; Source Generate_Bills_And_S tatements_010 Generate Bills/Statements 0106,RMB-05; Source Generate_Bills_And_S tatements_011 Revenue Accounts Receivable - 38